A house isn’t exclusively for married couples. It’s also for people who are decidedly single (or have yet to meet that “special someone” in their life). According to a report published in USA Today, over 38 percent of homeowners in the U.S. are single.
Purchasing a house, however, is hardly easy. Prospective single homebuyers may have a tough time navigating through the process of homeownership. Lending standards, for instance, could potentially pose a problem to single buyers, as they solely rely on their income to qualify for a mortgage.
The good news is that aspiring single homebuyers can take the following steps to make the home buying process more manageable:
Take a Hard Look at Your Budget
Scrutinize your expenses and figure out if buying a home is feasible for you. If you’re intent in getting a house, you’ll need to make financial sacrifices to achieve your goal of homeownership. This includes cutting back on five-star lunches and monthly movies or sporting events. The money you’ve saved should go towards a home purchase.
Consider Special Home Loan Programs
Single buyers with only one source of income can apply for an FHA loan. This type of government-backed mortgage requires lower credit scores to qualify and provides low loan interest rates. First-time homebuyers can enjoy a low down payment rate of 3.5 percent.
If you’re going to apply for an FHA loan, take note that this mortgage requires more documentation and underwriting. Additionally, check if your lender offers this program.
Remember to Refinance
If you do qualify for a traditional mortgage loan program, such as an adjustable-rate mortgage (ARM), make sure that you refinance to a more favorable interest rate. When you take advantage of a low mortgage rate, you enjoy lower monthly payments. A lower rate could also help you establish your equity more quickly and bring your debts under control.
Never House Hunt by Yourself
Although purchasing a home can be exciting, you shouldn’t let your emotions cloud your judgment or decision making. When you’re searching for the right house, involve one or two trustworthy individuals in your homebuying process. They’ll serve as your sounding board and voice of reason when you’re not sure what to do.
Request a Home Inspection
If you already have a house that you want to buy, make sure that you hire a qualified property inspector to inspect your chosen home. An accurate home inspection report can notify you of any major defects in a home purchase.
If the home inspector finds serious problems with the home you want, use the information to ask the seller to perform reasonable repairs. If the seller refuses, you could renegotiate the asking price, ask the seller to shell out more cash on closing costs, or walk away from the transaction. The last thing you want to happen is to blow your budget on anticipated repairs.
Consider “House Hacking”
House hacking is the process of buying an investment real estate, living in one of the units, and renting out the vacant rooms. With this strategy, you can use your rental income to cover a chunk of your home loan.
These suggestions can empower single buyers to purchase the house they want. Homeownership is a lifestyle change and a major investment. You’ll want to be prepared so that you won’t find yourself overstretched after getting a new home.